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Commissioner of Central Excise, Ludhiana Versus M/s. Nexo Products (India)

2015 (8) TMI 790 - PUNJAB & HARYANA HIGH COURT

Duty demand u/s 11A - Shortage of goods found - Clandestine removal of goods - Held that:- Specific defence had been taken by the manufacturer that no effort had been made to segregate the nuts and bolts into various sizes and to find the shortage by comparing the same with the recorded balance and there was huge stock of 91 lacs pieces of various sizes of nuts and bolts and it was impossible for the Department to come to a conclusive factual finding that there was shortage of 14,25,900 pieces o .....

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been utilized to manufacture the said quantity. Neither the fact of purchase of raw material from the vendors or the sale to the consumers was brought on record. In the absence of any corroborative evidence, the levy of such a huge demand was, thus, totally arbitrary and has been rightly set aside. - Decided against Revenue. - CEA No. 80 of 2014 - Dated:- 7-8-2015 - Hon'ble Mr. Justice S. J. Vazifdar, ACJ And Hon'ble Mr. Justice G. S. Sandhawalia,JJ. For the Appellant : Mr. Kamal Sehgal .....

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14,76,183/- dated 17.07.2006, imposed by the Adjudicating Authority under Section 11-A of the Act was set aside. 2. The appellant-Revenue has raised the following substantial questions of law: i) Whether the Hon'ble Tribunal is justified in rejecting the appeal of the Department without discussing the arguments put forth in the ground of appeal duly supported by relevant citations of Hon'ble Supreme Court of India & Tribunal? ii) Whether the department is expected to prove the case o .....

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t the time of inspection and after making physical verification in the presence of the Proprietor and the Production Manager, shortage of 14,25,900 pieces of nuts and bolts valued at ₹ 14,76,183/- was detected which involved evasion of tax to the tune of ₹ 24,26,480/-. Notice was issued on the basis of admission made by the Proprietor that the said quantity of finished goods were cleared on cash sale basis, without issuance of any invoice and without payment of Central Excise Duty an .....

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of the stock was made and the whole case was made for coercing the Proprietor to give the statement which was, accordingly, retracted and withdrawn. Plea taken was that it was not possible to segregate nuts and bolts and find the sizes by comparing with the recorded balance as they had stock of approximately 91 lacs pieces of various sizes of nuts and bolts and it was impossible to find a shortage from such a huge quantity. The daily stock account which is the photocopy register was also attach .....

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ound to further show some evidence. It was also pointed out that the entire account of duty had already been deposited on the same date of the visit and the show cause notice was of the same amount and it was not required to be issued and no penalty could be imposed, in such circumstances as the payment had been made prior to the notice being issued. Without meeting any of the contentions which were raised in the show cause notice, the Adjudicating Authority, however, confirmed the demand and al .....

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enalty etc. were set aside vide order dated 24.08.2007. In the appeal filed by the Revenue, the plea that the assessee was manufacturing different varieties of nuts and bolts and was maintaining RG-I register for making entries was also taken into consideration to come to a conclusion that it was impossible for the visiting Officers to detect the shortage on variety basis and no inventory had been prepared. The sole statement of the Proprietor could not be a valid ground to impose the demand and .....

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